PAAPAM terms Sindh tractor scheme non-transparent

Pakistan Association of Automotive Parts and Accessories Manufacturers (PAAPAM) in its emergent meeting on Wednesday raised serious concern over the Sindh Tractor Scheme and termed it non-transparent and counterproductive. PAAPAM called an emergent meeting of its management committee to discuss the Sindh government tractor subsidy scheme and deliberated in details the pros and cons of the scheme. It was unanimously agreed that historically such schemes have been harmful for the industry.
The PAAPAM Chairman Mumshad Ali said that tractor subsidy schemes have had serious transparency issues in the past where level playing field was not provided to all the assemblers of tractors, besides such schemes were money making opportunity for the influentials, who end up winning the balloting for such schemes and later sell the scheme tractors in the open market at lower than factory prices.
Besides, such schemes disrupt the natural sale cycle of the industry. Tractor sales was dropped at the time of announcement of such schemes in the provincial budgets as was witnessed in June last year, followed by a drop in sales before the official launch of such schemes, he added.
The chairman further said that these subsidy schemes should be replaced with the low mark-up five-year loans for the farmers which would make the tractor affordable for the farmers and give long term growth to the industry. He asked the political leadership of the provinces and the country to compare the tractor growth in neighbouring India over the last five years, with the demand pattern for tractors in Pakistan. Tractor sales have halved since 2011 in Pakistan whereas in India they are on a steady growth pattern due to coherent and stable policies, he added.
He urged the government to put prudent policies in place which work in unison. The federal government levies general sales tax on tractors which has changed several times in the last five years, while the provincial governments subsidies them one year and leave it at the market's mercy.
The government should address the tractor issue on long-term basis keeping in view the shortage of farm mechanisation in the country when compared with other countries in the region and the world. Long-term view must be taken and short-term measures discontinued, he maintained.